Depending on the location of the property you wish to buy, as a First-Time Caymanian Buyer, you may be eligible for a reduced rate of stamp duty or, even better, a total stamp duty exemption! Updates to the Stamp Duty Law in January 2019 took the threshold for the First-Time Caymanian Buyer concession from CI$300,000 to CI$400,000 for homes, and the threshold for 'raw' undeveloped land from CI$100,000 to CI$150,000. Yusssss, we hear you shout! Well, there is a little more to it and we'd certainly recommend you seek legal advice once ready to begin. To get you started, we've put together a quick summary on Stamp Duty 101. Here goes… BASIC STAMP DUTY RULES Normally, on every property purchase, a stamp duty is paid to the Cayman Islands Government at a rate of 7.5% of the value of the property or land. E.g. if the property is CI$200,000, then CI$15,000 extra will be owed on closing (on top of your purchase price and mortgage down payment). It’s important to be aware that the banks who lend you the money to buy your home will not allow you to add the stamp duty fee to your mortgage. CONCESSION ELIGIBILITY First things first, you’ve got to be Caymanian (and we know this in itself can be complicated!). It's advisable to make an application to the Minister of Finance's office at the Government Administration Building prior to your property purchase to ensure your eligibility. (See link below) You will need to prove that you are Caymanian and if you are applying with your spouse then you will need to provide a certified copy of the marriage certificate. A sworn affidavit signed by a Notary Public or Justice of the Peace is required together with a copy of the land register of the property you want to purchase and recent private sector valuation report (within last six months from an approved valuation survey) proving the value of the land. EXCEPTIONS There are some exceptions that a first-time Caymanian buyer needs to be aware of when selecting potential properties to buy. Certain land or property located in the Seven Mile Beach corridor and in George Town will not qualify for the stamp duty waiver; the full 7.5% stamp duty would be due. Also, be aware that stamp duty exemptions do not apply to overseas first-time buyers. Interests in property held in the name of a company also do not qualify for reduced rates of stamp duty, regardless of the ownership of the company. THE RATES AND REQUIREMENTS Caymanian buyers may qualify for a reduced rate of stamp duty but only when the land or property is for your first owner-occupied dwelling and providing that the market value is below certain CI$ thresholds. Simply put, to be eligible for the stamp duty exemption: CURRENTLY To be eligible for full stamp duty exemption: Land - current market value of raw, undeveloped land cannot exceed CI$150,000 Property - current market value of building and land cannot exceed CI$400,000 To be eligible for 2% exemption: Land - current market value of land must be over CI$150,000 but not exceed CI$200,000 Property - current market value of building and land must be over CI$400,000 but not exceed CI$500,000 The specific rates of duty applicable together with application requirements can be found here: CNS Library MARRIED? Caymanian spouses: If a husband and wife who are both Caymanian first-time homeowner have been approved for stamp duty waiver and are taking title in both of their names, then they will effectively ‘use up’ both of their waivers on the purchase. If either spouse takes title in their name solely, then their spouse’s waiver may be used for another property purchase. Caymanian and non-Caymanian spouse: If a husband and wife intend to take title in both of their names and only one spouse is Caymanian, then the stamp duty waiver will only be eligible on 50% of the current market value of the property. The non-Caymanian spouse will be required to pay the standard 7.5% stamp duty fees on 50% of the purchase price. DON’T FORGET… Stamp duty waivers also cannot be used partially or split between property purchases. Once title has been taken, there is a restriction placed on the land register preventing the owner(s) from transferring title to the property for a five-year period. That means you won’t want to sell your home for five years after purchase or you’ll risk having to pay the full stamp duty owed. Any transfer of title which holds the restriction requires the consent from the Financial Secretary to remove or lift the restriction. Don’t forget, team Property Cayman is able to advise you on ANY property on island, no matter if you discover it via CIREBA, Ecay, or private sale. We can help guide you through the process as our team of agents have over 20 years’ experience in the Cayman Islands real estate market. Even more importantly, we care about connecting good people with great places! All you have to do is get in touch. Don’t worry, it’s free of charge; all we ask is that you trust us to do our job - to help you find your perfect home! We look forward to helping you on your property journey.